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EXHIBIT 10.14
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (the "Agreement") made and entered into this
26th day of December, 1997, by and among XXXXX XXXXX, a resident of the state of
North Carolina ("Xxxxx"), XXXXXXXX'X, INC., a corporation organized and existing
under the laws of the State of Tennessee ("Kirkland's") and the other
undersigned corporations hereto, each a corporation organized and existing under
the laws of the State of Tennessee (Kirkland's and such other corporations
hereinafter referred to individually as a "Corporation" and collectively the
"Corporations").
RECITALS OF FACT
Xxxxx is the owner of the issued and outstanding Stock of the
Corporations set forth on Exhibit A attached hereto ("Shares"). Xxxxx has served
as an employee, officer and director of the Corporations. On even date herewith,
Xxxxx tendered his resignation as an officer and director of the Corporations
effective the later of January 7, 1998, or the date of payment in full of the
Note referenced in Paragraph 2 hereof.
Xxxxx has determined that it is in his best interest to retire from
active business with Corporations to allow him to pursue other interests. To
accomplish this, Xxxxx desires to realize the value of his investment in the
Corporations, and has therefore proposed to tender all of his Shares in the
Corporations for redemption at a value and upon certain terms and conditions as
hereinafter provided.
Xxxxx and the Corporations desire to establish and confirm their
understanding with regard to that certain letter agreement dated June 12, 1996,
executed by Kirkland's and agreed to and accepted by Xxxxx (the "Employment
Agreement"), and the continuing rights and obligations of the parties
thereunder. The Employment Agreement is attached hereto for reference as Exhibit
B.
NOW, THEREFORE, in consideration of the promises and undertaking as
herein provided, the parties hereto do covenant and agree as follows:
1. Redemption of Stock. On the date hereof, Xxxxx has tendered and
delivered to Kirkland's, as agent for each of the Corporations, as applicable,
certificates evidencing his ownership of the Shares, properly endorsed for
redemption, which Shares constitute all of the shares of the capital stock of
the Corporations owned by Xxxxx. By execution of this Agreement the Corporations
acknowledge receipt of such stock certificates.
2. Redemption Price and Payment. On January 7, 1998, the Corporations
will pay to Xxxxx the aggregate sum of Six Million Eight Hundred Eighty Eight
Thousand Five Hundred Sixty Six Dollars ($6,888,566) (the "Redemption Price"),
which obligation is represented by the promissory note of the Corporations, a
copy of which is attached hereto as Exhibit C, (the "Note") which Note has been
duly executed, approved and authorized by the Corporations and this date
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delivered to Xxxxx. By execution of this Agreement Xxxxx acknowledges receipt of
such Note. It is specifically understood and agreed among all parties hereto
that the Redemption Price constitutes the fair market value for the Shares. The
parties agree that the Redemption Price shall be allocated among the Shares in
accordance with the Purchase Price Allocation Statement attached hereto as
Exhibit D. Each Corporation shall be liable to pay the portion of the aggregate
Redemption Price set forth on Exhibit "D" as its allocable share.
3. Payment of Redemption Price; Other Payment By Xxxxx. The Redemption
Price will be paid via wire transfer to the financial institution designated to
the Corporations by Xxxxx, which information Xxxxx will provide in writing at
least five business days prior to January 7, 1998. On January 7, 1998, Xxxxx
will pay to the Corporations $2,686.00 by check, which amount represents the
balance due on capital contributions by Xxxxx to certain of the newer
Corporations.
4. Representations and Warranties of Xxxxx. Xxxxx represents and
warrants to the Corporations that Xxxxx is the legal owner of the Shares, that
he has the full right, title, and interest to such Shares, that he has the right
and power to sell and transfer such Shares to the Corporations, and that such
Shares are unencumbered, except for a pledge by Xxxxx to BankBoston, N.A., as
Agent in connection with the Credit Agreement dated as of June 12, 1996 , as
amended, among Kirkland's Holdings L.L.C., the Borrowers named therein
(including Xxxxxxxx'x, Inc.), the Banks named therein, BankBoston, N.A., as
Administrative Agent (the "Administrative Agent"), and Xxxxxx Commercial Paper,
Inc., as Arranger. The parties will obtain a release of such pledge of stock by
the Administrative Agent, as represented by a letter from the Administrative
Agent, to be attached hereto as Exhibit E on or before January 7, 1998. Xxxxx
further represents and warrants to the Corporations that he has not employed any
broker or finder in connection with this transaction, and that no broker or
finders fee is due to any person in connection with this transaction. The
representations and warranties made by Xxxxx in this paragraph shall survive the
execution of this Agreement and the closing of the transactions contemplated
herein.
5. Representations and Warranties of the Corporations. The Corporations
represent and warrant to Xxxxx that this Agreement and the Note constitute the
valid and binding obligation of each of the Corporations, and that this
Agreement and the Note have been authorized and approved by all necessary
corporate action of each of the Corporations.
6. Rights and Obligations Under Employment Agreement. (a) Kirkland's
agrees, notwithstanding Xxxxx'x resignation of his employment under the
Employment Agreement, (i) to make a one-time compensation payment to Xxxxx of
$259,000 on January 7, 1998, and (ii) to continue to pay to Xxxxx only the
portion of the "Annual Salary" (as such term is defined and used in the
Employment Agreement) represented by the annual amount of $275,000, or $22,917
per month , which is payable through the term ending June 12, 2000, as provided
for in the Employment Agreement, and (iii) to pay for the benefit of Xxxxx and
his immediate family premiums for the health, medical and hospitalization
insurance on the same basis currently provided to Xxxxx and other Company
employees, so long as the salary payments to Xxxxx in (ii) above are in effect.
Xxxxx acknowledges that, except as provided in the preceding sentence, he will
receive, or be
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entitled to receive, no other compensation or benefits from the Corporations
under the Employment Agreement or otherwise.
(b) Aside from payment of the portion of the Annual Salary as
provided in Section 6(a) above, Xxxxx hereby releases Kirkland's, and each of
the other Corporations, from any and all liabilities and obligations of the
Corporations under the Employment Agreement.
(c) Xxxxx acknowledges and agrees that the restrictive
covenants set forth in Section 6.1 of the Employment Agreement, as well as the
other provisions of Section 6 of the Employment Agreement, (i) are incorporated
herein by reference as fully as if set out verbatim, (ii) are an ongoing and
integral element of this Agreement, and (iii) shall continue in full force and
effect until June 11, 2003, all as provided in the Employment Agreement.
7. General Release. Except for the matters in the Employment Agreement
as set forth in Paragraph 5 hereof, the payment obligation to Xxxxx provided for
in Paragraph 2 hereof, and the survival of the representations and warranties
made by Xxxxx in Paragraph 4 hereof, the parties hereunder each fully and
unconditionally release the other party from any and all claims, liabilities,
contracts, actions, debts, chooses in action, and any and all other matters, it
being the intent of each of the parties to grant to the other a full and
complete general release, as more particularly set forth in the General Release
executed by each of the parties and attached hereto as Collective Exhibit F.
Each of the parties by execution of this Agreement acknowledges receipt of each
of such General Releases.
8. Other Documents. The parties agree to execute and deliver all such
other and further documents, instruments and papers as may reasonably be deemed
necessary or advisable to carry out the intent and purpose of this Redemption
Agreement.
9. Binding Effect. The terms and conditions of this Redemption
Agreement are binding upon and shall inure to the benefit of the parties hereto,
their heirs, executors, administrators, successors and assigns.
10. Controlling Law. This Agreement shall be construed and enforced in
accordance with Tennessee law, without regard to conflicts of laws principles.
In the event of any subsequent question or dispute as to the meaning of any
provision herein, the laws of the State of Tennessee, shall be relied upon to
resolve such question.
11. Entire Agreement. This document contains the entire agreement among
the parties, and any amendments or alterations hereof or additions hereto shall
be of no force or effect whatsoever unless in writing and signed by all the
parties.
12. Exhibits. The Exhibits attached hereto and referenced herein are
incorporated into this Agreement by such references.
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13. Severability. If any provisions of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity or unenforceability will
not affect any other provisions hereof.
IN WITNESS WHEREOF, the parties have signed this Redemption Agreement,
or caused this Redemption Agreement to be executed by their duly authorized
representative, as of the date first written above.
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, President and Chief Executive Officer
of each of the companies listed below
Xxxxxxxx'x, Inc.
Kirkland's of Pecanland Mall, Monroe, LA, Inc.
Kirkland's of Town Center at Xxxx, Atlanta, GA, Inc.
Kirkland's of Xxxxxxxx Xxxxx, Xxxxxxx, XX, Inc.
Kirkland's of Peachtree Mall, Columbus, GA, Inc.
Kirkland's of Cumberland Mall, Atlanta, GA, Inc.
Kirkland's of Xxxxxxxx Place Mall, Chattanooga, TN, Inc.
Kirkland's of Houston Galleria, Houston, TX, Inc.
Kirkland's of Mall of Memphis, Memphis, TN, Inc.
Kirkland's of Woodland Hills Mall, Tulsa, OK, Inc.
Kirkland's of Dayton Mall, Dayton, OH, Inc.
Kirkland's of Oxmoor Center, Louisville, KY, Inc.
Kirkland's of Xxxxx Xxxxxx Xxxx, Xxxxxx, XX, Inc.
Kirkland's of Valley View Center, Dallas, TX, Inc.
Kirkland's of Chesterfield Towne Center, Richmond, VA, Inc.
Kirkland's of Xxxx Xxxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
Kirkland's of Montgomery Mall, Montgomery, AL, Inc.
Kirkland's of Xxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
Kirkland's of Southpark Mall, Richmond, VA, Inc.
Kirkland's of Eastland Mall, Evansville, IN, Inc.
Kirkland's of Xxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
Kirkland's of Hickory Ridge Mall, Memphis, TN, Inc.
Kirkland's of Regency Square Mall, Jacksonville, FL, Inc.
Kirkland's of McCain Mall, Little Rock, AR, Inc.
Kirkland's of River Ridge Mall, Lynchburg, VA, Inc.
Kirkland's of Bel Air Mall, Mobile, AL, Inc.
Kirkland's of The Mall at Xxxxxx Crossing, Tupelo, MS, Inc.
Kirkland's of Cortana Mall, Baton Rouge, LA, Inc.
Kirkland's of Bellevue Center, Nashville, TN, Inc.
Kirkland's of Tri-County Mall, Cincinnati, OH, Inc.
Kirkland's of Xxx Xxxx xx xxx Xxxxxxx, Xxxxxxxxxxxx, XX, Inc.
Kirkland's of Xxxxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
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Kirkland's of Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX, Inc.
Xxxxxxxx'x xx Xxxxxxxx Xxxxx, Xxxxxxxxx, X.X., Inc.
Kirkland's of Xxxx Xxxxxxx Xxxx, Xxxxxxx, X.X., Inc.
Kirkland's of Cool Springs Galleria, Nashville, TN, Inc.
Kirkland's of Kenwood Towne Centre, Cincinnati, OH, Inc.
Kirkland's of St. Louis Galleria, St. Louis, MO, Inc.
Kirkland's of Wiregrass Commons Mall, Dothan, AL, Inc.
Kirkland's of Regency Mall, Richmond, VA, Inc.
Kirkland's of Xxxxxxxx Mall, Florence, KY, Inc.
Kirkland's of Acadiana Mall, Lafayette, LA., Inc.
Kirkland's of Padre Staples Mall, Corpus Christi, TX, Inc.
Kirkland's of Xxxxxx Village, Canton, OH, Inc.
Kirkland's of West Oaks Mall, Houston, TX, Inc.
Kirkland's of Charleston Town Center, Charleston, W. VA, Inc.
Kirkland's of Crestwood Plaza, St. Louis, MO, Inc.
Kirkland's of White Xxxxx Mall, Baltimore, MD, Inc.
Kirkland's of Xxxxxx Creek Mall, Dallas, TX, Inc.
Kirkland's of Baybrook Mall, Houston, TX, Inc.
Kirkland's of Governor's Square Mall, Tallahassee, FL, Inc.
Kirkland's of Xxxxxx Creek Mall, Austin, TX, Inc.
Kirkland's of Highland Mall, Austin, TX, Inc.
Kirkland's of Battlefield Mall, Springfield, MO, Inc.
Kirkland's of Penn Square Mall, Oklahoma City, OK, Inc.
Kirkland's of Oak Park Mall, Kansas City, KS, Inc.
Kirkland's xx Xxxx Xx. Xxxxxxx, Xxxxxxxxxx, XX, Inc.
Kirkland's of Xxxxxx Xxxxx Mall, Baltimore, MD, Inc.
Kirkland's of Oakwood Center, New Orleans, LA, Inc.
Kirkland's of Xxx Xxxx xx Xxxxxxx Xxxx, Xxxxxxx Xxxx, XX, Inc.
Kirkland's of Glenbrook Mall, Ft. Xxxxx, IN, Inc.
Kirkland's of Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
Kirkland's of Northpark Mall, Joplin, MO, Inc.
Kirkland's of Orlando Fashion Square, Orlando, FL, Inc.
Kirkland's of Xxx Xxxx xx Xxxxxxxxx Xxxxxxx, Xxxxxx, XX, Inc.
Kirkland's of St. Xxxxxxx Xxxxx Center, Waldorf, MD, Inc.
Kirkland's of Regency Mall, Florence, AL, Inc.
Kirkland's of South Plains Mall, Lubbock, TX, Inc.
Kirkland's of The Parks at Arlington, Ft. Worth, TX, Inc.
Kirkland's of Xxxxx Xxxx Xxxx, Xxxxxxxxx, XX, Inc.
Kirkland's of St. Clair Square, St. Louis, MO, Inc.
Kirkland's of Turtle Creek Mall, Hattiesburg, MS, Inc.
Kirkland's of The Woodlands, Houston, TX, Inc.
Kirkland's of Xxxxxxx Town Center, Tampa, FL, Inc.
Kirkland's of Memorial City Mall, Houston, TX, Inc.
Kirkland's of University Mall, Tuscaloosa, AL, Inc.
Kirkland's of Xxxxx Xxxx Xxxx, Xxxx Xxxxxx, XX, Inc.
Kirkland's of Panama City Mall, Panama City, FL, Inc.
Kirkland's of Town East Mall, Mesquite, TX, Inc.
Kirkland's of Xxxxxxxx Xxxx Xxxx, Xxxxxxx, Xx, Inc.
Kirkland's of Xxxxxxxx Xxxxxx Xxxx, Xxxxxxx, X.X., Inc.
Kirkland's of Oak Hollow Mall, Highpoint, N. C., Inc.
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Kirkland's of Xxx Valley Mall, Chicago, IL, Inc.
Kirkland's of Hawthorne Mall, Chicago, IL, Inc.
Kirkland's of Stratford Square, Chicago, IL, Inc.
Kirkland's of Orland Square, Chicago, IL, Inc.
Kirkland's of Coastland Mall, Naples, FL, Inc.
Kirkland's of Carolina, Inc.
Kirkland's of Charlotte, Xxxxxxxx Mall, Inc.
Kirkland's of Tennessee, Inc.
K. C. Corp., Inc.
Kirkland's of Greensboro, Four Seasons Mall, Inc.
Kirkland's of Fayetteville, Cross Creek Mall, Inc.
Kirkland's of Wilmington, Independence Mall, Inc.
Kirkland's III, Jackson-Metro Center, Inc.
Kirkland's of Memphis, Tennessee, Laurelwood Shopping Center, Inc.
Kirkland's of Ridgeland, Mississippi, Northpark Mall, Inc.
Kirkland's of Knoxville, East Towne Mall, Inc.
Kirkland's of Huntsville, Madison Square Mall, Inc.
Kirkland's of Valley View Mall, Roanoke, VA, Inc.
Kirkland's of Nashville, Hickory Hollow Mall, Inc.
Kirkland's of Birmingham, Riverchase Galleria, Inc.
Kirkland's of Briar Xxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Inc.
Kirkland's of Rivergate Mall, Nashville, TN, Inc.
Kirkland's of Edgewater Mall, Biloxi, MS, Inc.
Kirkland's of Town Center Plaza, Kansas City, KS, Inc.
Kirkland's of Castleton Square, Indianapolis, IN., Inc.
Kirkland's of Xxxxxxx Mall, Pensacola, FL, Inc.
Kirkland's of University Park, South Bend, IN, Inc.
Kirkland's of Westgate Mall, Spartanburg, SC, Inc.
Kirkland's of Westgate mall, Amarillo, TX, Inc.
Kirkland's of Meridian Mall, Lansing, MI, Inc.
Kirkland's of Cottonwood Mall, Albuquerque, NM, Inc.
Kirkland's of University Mall, Tampa, FL, Inc.
Kirkland's of Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxxxxx, XX, Inc.
Kirkland's of Indian River Mall, Vero Beach, FL, Inc.
Kirkland's of Xxxxxx Square, St. Petersburg, FL, Inc.
Kirkland's of Northgate Mall, Cincinnati, OH, Inc.
Kirkland's of Xxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
Kirkland's of Park City Center, Lancaster, PA, Inc.
Kirkland's of Northpark Mall, Davenport, IA, Inc.
Kirkland's of Perimeter Mall, Atlanta, GA, Inc.
Kirkland's of Wolfchase Galleria, Memphis, TN, Inc.
Kirkland's of Lindale Mall, Cedar Rapids, IA, Inc.
Kirkland's of Xxxxxxxx Mall, Albuquerque, NM, Inc.
Kirkland's of Willowbrook Mall, Houston, TX, Inc.
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Exhibit A
Shares of Stock
Corporation Shares Class of Stock Certificate
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Group A and B 7,250 Common 4
Companies (Voting)
650 Common 1
(Non-Voting)
7,900 Class B 3
Preferred
2,878 Class C 3
Preferred
Group C 7,900 Common 1
Companies (Non-Voting)
3,000 Class B 3
Preferred
(Voting)
4,900 Class B 1
Preferred
(Non-Voting)
Group D 7,900 Common 4
Companies (Voting)
7,900 Class B 3
Preferred
Group E 79 Common 4
Companies
The listing of Group A, B, C, D, and E Companies begins on the next page (A-2).
A-1
